An online seller in India needs GST registration when their aggregate turnover in a financial year crosses the threshold for their kind of supply, and in some cases earlier. The Central Board of Indirect Taxes and Customs sets that threshold at ₹40 lakh for suppliers of goods and ₹20 lakh for suppliers of services, with lower limits in some special category states. Selling goods through a marketplace that collects tax at source can require registration regardless of turnover, and some sellers register voluntarily because it opens doors to business customers, marketplaces and input tax credit.
This guide helps you decide, step by step. It explains what registration is and what changes once you have it, sets out five tests that decide whether you need it, shows how aggregate turnover is actually counted, works through ten realistic seller scenarios and a month-by-month example of crossing the threshold, explains the effect on pricing, lists the documents and steps on the GST portal, and ends with the mistakes to avoid. It is general information and not tax advice. GST rules and notifications change, so every important point is linked to its source and should be confirmed with a chartered accountant before you act.
Quick answer: You generally need GST registration if your aggregate turnover exceeds ₹40 lakh (goods) or ₹20 lakh (services), or lower in some special category states, or if you supply goods through a marketplace that is required to collect tax at source. Aggregate turnover is counted across all your channels under one PAN, not store by store. If you are close to the limit, register early rather than late, because selling while required to be registered creates tax liability and penalties.
What GST registration is, in plain terms
Registration under the Goods and Services Tax gives a business a fifteen-character number called a GSTIN. The first two digits identify the state, the next ten are the PAN of the business or proprietor, and the remaining characters identify the entity, include the letter Z and end with a check character. A GSTIN is tied to a state, so a business operating in several states may hold more than one.
Registration is what authorises a seller to charge GST on sales, to issue a tax invoice, and to claim credit for the GST paid on business purchases. A person who is not registered cannot do these things. Our guide to GST invoices for online stores explains what the invoice must contain once you are registered, and our guide to GST compliance for ecommerce sellers explains the monthly returns that follow.
What changes when you register
| Area | Not registered | Registered |
|---|---|---|
| Charging GST | You do not charge GST on sales | You charge GST at the correct rate on taxable sales |
| Invoices | You issue an ordinary bill or receipt | You issue a tax invoice with the Rule 46 particulars, and credit notes for reductions |
| Input tax credit | You cannot claim credit for GST paid on purchases | You may be able to claim eligible credit, subject to conditions |
| Returns | No GST returns | Monthly or quarterly returns, even in months with no sales |
| Marketplaces | Often not permitted to sell goods | Able to sell on marketplaces that require a GSTIN |
| Business customers | They cannot claim credit on your invoices, so some will not buy | Registered buyers can claim credit, which makes you more attractive |
| Composition scheme | Not applicable | Not available if you make inter-state outward supplies of goods or supply through e-commerce operators who collect tax at source, according to the GST portal (Opt for Composition Scheme) |
The central trade-off is simple. Registration adds compliance work and, unless you absorb it, a visible tax on your prices, and in return it removes limits on where you can sell and who can buy from you.
The five tests that decide whether you need to register
Test 1: Is your aggregate turnover above the threshold?
The basic rule is turnover-based. The CBIC states that the threshold limit of aggregate turnover for exemption from registration is ₹40 lakh for suppliers of goods, with a lower limit in specified special category states, and ₹20 lakh for suppliers of services, again with a lower limit in specified special category states (CBIC, GST: An Update). That document dates from 2019, so confirm the current thresholds and the list of special category states on the official GST portal and with your accountant.
Test 2: Have you counted turnover correctly?
Aggregate turnover is wider than "my store's sales". According to the CBIC's FAQs, it includes the aggregate value of all taxable supplies, exempt supplies, exports of goods or services, and inter-state supplies of a person having the same PAN, computed on an all-India basis, and it excludes the taxes charged under the GST laws (CBIC, FAQs on tax collection at source). The practical effects for an online seller are:
- Sales on your own store, on marketplaces, on social media and at a physical counter all count, if they are under the same PAN.
- Exports and exempt supplies count, even though they carry no GST.
- Sales in every state are added together.
- The figure excludes the GST itself, so use the taxable value, not the amount customers paid.
Test 3: Do you sell goods through a marketplace?
Marketplaces and other e-commerce operators may be required to collect tax at source on supplies made through their platform. The CBIC's FAQs state that every person supplying goods through an e-commerce operator is required to register irrespective of the value of supply, while a person supplying services through a platform below ₹20 lakh (₹10 lakh in specified special category states) is exempt from compulsory registration, subject to conditions (CBIC, FAQs on tax collection at source). That FAQ is from 2018, and later notifications have introduced limited exemptions for certain small sellers, which is why you must confirm the current position with your accountant. In practice, selling goods on a major marketplace usually means you need a GSTIN from the start; see our beginner's guide to selling online in India for the wider context.
Test 4: Does another compulsory category apply?
Section 24 of the CGST Act lists categories of persons who must register whatever their turnover, including e-commerce operators themselves, casual taxable persons and non-resident taxable persons, among others. Inter-state supplies are a point where the rules have been adjusted by notifications over time, so an online store that ships to other states should ask its accountant whether it is covered by an exemption at its turnover level. The same question applies if you supply services, supply on someone else's behalf, or carry out a business that falls under a special provision.
Test 5: Do you want to register voluntarily?
A seller below the threshold can usually choose to register. Common reasons include:
- Selling to registered businesses who want invoices they can claim credit on.
- Selling on marketplaces that require a GSTIN.
- Claiming credit for GST paid on packaging, equipment, courier and platform fees.
- Presenting a more established image to customers, banks and suppliers.
- Avoiding a scramble when your turnover grows past the limit.
The costs are real: once registered you must comply with all the provisions, including filing returns on time even when you have no sales. Decide with your accountant whether the benefits exceed the work.
Ten seller scenarios
The table gives a likely starting position for common situations. It is a guide to the questions to ask, not a ruling, because each case depends on the current law and the facts.
| # | Situation (assumed figures) | Likely position | Ask your accountant |
|---|---|---|---|
| 1 | Own store only, goods, ₹15 lakh a year, sells within one state | Below the goods threshold, so registration is generally not compulsory | Confirm the state's threshold and consider voluntary registration |
| 2 | Own store only, goods, ₹15 lakh, ships to customers in other states | Below the threshold, but inter-state rules matter | Is an exemption available for inter-state supply of goods at this turnover? |
| 3 | Sells goods on a marketplace, ₹5 lakh a year | Registration is generally required irrespective of turnover | Does a notification exempt small intra-state sellers in my case? |
| 4 | Services only, ₹12 lakh a year, no marketplace | Below the services threshold | Check state limit and any inter-state service rules |
| 5 | Own store ₹18 lakh, marketplace ₹14 lakh, exports ₹3 lakh, exempt supplies ₹2 lakh, counter sales ₹8 lakh, same PAN | Aggregate turnover is ₹45 lakh, which is above the goods threshold | Register now; confirm the time limit from the date the threshold was crossed |
| 6 | Two small businesses under one proprietor's PAN, ₹25 lakh each | Turnover is counted together, so ₹50 lakh in total | Registration likely required for the PAN |
| 7 | Seller of packaged food, ₹10 lakh | Below the threshold, but food needs separate licences | FSSAI licensing, and any GST implications |
| 8 | Drop-shipper who takes orders and has the supplier deliver, ₹20 lakh | Below the threshold, but the invoicing chain is complex | Who invoices whom, and who is the supplier for GST? |
| 9 | Seller below the threshold who wants business buyers | Not compulsory, but voluntary registration is possible | Compare the benefit with the compliance cost |
| 10 | Seller with a warehouse in a second state | State-based registration issues arise | Is an additional place of business or a separate registration needed? |
A worked example: counting turnover and spotting the crossing
Scenario 5 in the table is worth working through. The figures are assumed for illustration, and all are taxable values excluding GST:
| Channel | Turnover in the financial year |
|---|---|
| Own online store | ₹18 lakh |
| Marketplace sales | ₹14 lakh |
| Exports | ₹3 lakh |
| Exempt supplies | ₹2 lakh |
| Counter sales at a physical stall | ₹8 lakh |
| Aggregate turnover | ₹45 lakh |
The seller might believe the online store, at ₹18 lakh, is far below ₹40 lakh. The aggregate across all channels is ₹45 lakh, which exceeds the goods threshold. Because the figure is built up through the year, the crossing happens at a specific month, and a seller who does not track a running total will notice only when someone else points it out. Here is a month-by-month view of the same business, in lakh rupees:
| Month | Sales in the month | Cumulative for the year | Status |
|---|---|---|---|
| April | 2.0 | 2.0 | Well below |
| May | 2.5 | 4.5 | Well below |
| June | 3.0 | 7.5 | Well below |
| July | 3.5 | 11.0 | Well below |
| August | 4.0 | 15.0 | Below |
| September | 4.5 | 19.5 | Below |
| October | 5.0 | 24.5 | Below |
| November | 6.0 | 30.5 | Approaching (about 76%) |
| December | 7.0 | 37.5 | Above 80% of ₹40 lakh: act now |
| January | 7.5 | 45.0 | Threshold crossed during the month |
The cumulative column is simple addition: 2.0 plus 2.5 is 4.5, plus 3.0 is 7.5, plus 3.5 is 11.0, plus 4.0 is 15.0, plus 4.5 is 19.5, plus 5.0 is 24.5, plus 6.0 is 30.5, plus 7.0 is 37.5, plus 7.5 is 45.0. A practical habit, which is our suggestion and not a legal rule, is to set an alert when the running total reaches 80% of the threshold, which is ₹32 lakh here. That alert would fire in December, with a month to prepare, instead of in February after the crossing. The law sets a time limit for applying after you become liable, commonly cited as thirty days, so confirm it with your accountant; the safest approach is to apply before you cross.
What registration does to your prices
Once you register, GST applies to taxable sales, and you must decide whether to absorb it or pass it on. Take an item you currently sell at ₹1,000 as an unregistered seller:
| Choice | Customer pays | Taxable value | GST at 18% (assumed) | You keep |
|---|---|---|---|---|
| Keep the ₹1,000 price and treat it as tax-inclusive | ₹1,000 | ₹847.46 | ₹152.54 | ₹847.46 |
| Raise the price so you keep ₹1,000 | ₹1,180 | ₹1,000 | ₹180 | ₹1,000 |
The first row follows from ₹1,000 × 100 ÷ 118, which is ₹847.46, leaving ₹152.54 as tax. The second adds 18% to ₹1,000. The 18% rate is used only to show the arithmetic and is not a statement about the right rate for any product. Registered sellers may offset part of this through credit for GST paid on eligible purchases such as packaging and courier charges, which your accountant will confirm. Many sellers phase the change, by adjusting prices at launch of a new season, so customers are not surprised.
The documents you need
The GST portal's guidance for a normal taxpayer says PAN is mandatory for registration (GST portal, Apply for Registration Normal Taxpayer). The documents and details listed in the portal's registration guidance typically include:
- The PAN of the business, or of the proprietor for a sole proprietorship.
- A valid email address and mobile number, which the portal verifies by OTP.
- Proof of the constitution of the business, such as a partnership deed or incorporation certificate, depending on the type of business.
- Proof of the promoters, partners or directors, with photographs.
- Proof of the principal place of business, such as a rent agreement with a utility bill, or an ownership document.
- Details of any additional places of business.
- Details of authorised signatories and proof of their appointment.
- Business bank account details, with a bank statement or the first page of the passbook.
Names must match across your PAN, bank account and address proofs. A mismatch is one of the most common reasons for a request for clarification, so check them before you start.
The application steps on the GST portal
- Part A. You enter your basic details, including PAN, email address and mobile number. The system generates a Temporary Reference Number. The portal warns that if you do not submit the application within 15 days, the TRN and everything entered against it will be purged (GST portal guidance).
- Part B. Using the TRN, you complete the detailed application across its sections: business details, promoters, authorised signatory, places of business, goods and services, bank accounts and state-specific information, and upload the documents.
- Authentication. You verify your identity, usually through Aadhaar authentication. The portal sends an authentication link to the registered mobile number and email, which it says is valid for 15 days.
- Submission and ARN. After successful submission and authentication, the system generates an Application Reference Number, which you use to track the application.
- Review. The tax authority reviews the application and may ask for clarification or further documents, or may carry out a verification. Reply promptly and precisely.
- Approval. On approval you receive your GSTIN and a registration certificate, which you should keep safe and display where the rules require.
The time to approval varies, and the rules set time limits that change depending on whether authentication is completed and whether further information is sought, so ask your accountant for current expectations and do not promise customers a date. If you use a professional to apply, make sure the application is submitted in your own name and that you hold the login details, because the registration is your legal record.
First 30 days after you get a GSTIN
- Enter the GSTIN, legal name and registered address in your store settings and on your website footer or contact page.
- Review every product's HSN code and GST rate with your accountant, and decide whether your prices include GST.
- Set up the invoice series so numbers are unique, consecutive and at most sixteen characters, and test sample invoices for intra-state and inter-state orders.
- Switch on GSTIN capture at checkout for business customers.
- Set up the return filing calendar, with reminders for the due dates and a monthly reconciliation routine.
- Open a separate account or ledger for GST collected, so tax is not spent as working capital.
- Update marketplace accounts, payment gateway and courier accounts with the GSTIN where they request it.
- Back up your registration certificate, application, login details and certificate of registration in a second place.
Selling in more than one state
A GSTIN belongs to a state. If you store stock, run a fulfilment centre or open a shop in another state, ask your accountant whether you need an additional place of business on your registration or a separate registration in that state, and how stock transfers between your own locations are documented. Do this before you move stock, not after, because the tax split on invoices and the registration both depend on where the goods are.
Mistakes that cost online sellers money
| Mistake | Why it hurts | Prevention |
|---|---|---|
| Counting only one channel when checking the threshold | You cross the limit without noticing | Add all channels under the PAN, and track a running total |
| Waiting until you have crossed the threshold | Tax liability and penalties from the date registration was due | Apply once you reach about 80% of the limit |
| Selling goods on a marketplace without a GSTIN | Account suspension or compliance gaps | Register before listing, subject to any exemption your accountant confirms |
| Forgetting exports and exempt supplies in turnover | Understated aggregate turnover | Include them as the definition requires |
| Name or address mismatch across PAN, bank and address proof | Queries and delays | Check documents against each other before applying |
| Letting an agent apply in their own details or keeping no login access | You lose control of your registration | Apply in your own name and keep credentials |
| Charging GST before you hold a GSTIN | Collecting tax you are not authorised to collect | Charge GST only once your GSTIN is active |
| Registering and then ignoring returns | Late fees, even with no sales | File nil returns where required, on time |
| Ignoring a second state | Registration gaps and wrong tax split | Check before moving stock |
If you stop selling or change your business
Registration continues until it is cancelled, and returns are due as long as it remains active. If you close the business, change its constitution or move, speak to your accountant about cancelling or amending the registration. Do not simply stop filing, because the obligation to file continues and late fees accumulate.
Registration and your online store platform
Your store needs your GSTIN in its settings so that invoices carry it and so the tax split is worked out from your state. If you are not registered, GST invoicing does not apply to your sales, and you will need a way to issue ordinary bills. ShopMate's terms ask merchants to provide accurate information on registration, including their GST number "if applicable" (ShopMate Terms and Conditions), and the platform stores the merchant's GSTIN in the store settings, and uses it to determine the merchant's state for the CGST, SGST and IGST split. Check with the team how your GSTIN, legal name and address appear on the invoice, because Rule 46 requires them. If you are not yet registered, ask the team during your demo how the store behaves without a GSTIN, and plan the date you will add it.
ShopMate charges a flat 5% commission plus 18% GST on every order, with no setup fee and no yearly maintenance charge, whether or not the merchant is GST-registered (ShopMate pricing). The platform also lets customers request a GST invoice at checkout with their own GSTIN, generates invoices showing CGST and SGST or IGST, and offers a GST report for your accountant (ShopMate). The decision to register, the choice of HSN codes and rates, and the filing of returns remain the merchant's responsibility, as the terms state.
Frequently asked questions
Is GST registration mandatory for online sellers in India?
It depends. You generally must register if your aggregate turnover exceeds the threshold for your supplies, ₹40 lakh for goods and ₹20 lakh for services, with lower limits in some special category states, or if you supply goods through a marketplace that collects tax at source. Below those limits and outside those cases, registration is usually voluntary. Confirm the current rules with your accountant.
Do I need GST to sell on Amazon or Flipkart?
Selling goods through a marketplace that is required to collect tax at source generally requires registration irrespective of turnover, according to the CBIC's FAQs, subject to limited exemptions introduced by later notifications. Check the marketplace's seller registration page and your accountant's advice before listing.
How is aggregate turnover calculated for GST registration?
It is the total value of all taxable supplies, exempt supplies, exports and inter-state supplies of a person with the same PAN, computed across India, excluding the GST charged. Sales on every channel count, including your own store, marketplaces and offline sales.
Can I register for GST voluntarily if I am below the threshold?
Generally yes. Voluntary registration lets you sell to registered businesses, use marketplaces that require a GSTIN and claim eligible input tax credit, but you must then comply with all the provisions, including filing returns on time.
What documents do I need for GST registration?
PAN, email and mobile number, proof of business constitution, proof of the promoters or partners, proof of the principal place of business, bank account details with a statement or passbook page, and details and photographs of authorised signatories. Names should match across all documents.
What happens if I sell without registering when I should have?
You may owe tax from the date registration was due, with interest and penalties, and may have to regularise your position. Because the amounts and treatment depend on your circumstances, speak to a chartered accountant at once rather than waiting for a notice.
Does ShopMate require a GST number?
ShopMate's terms ask merchants for their GST number if applicable. If you are registered, the store uses your GSTIN on invoices and to work out the tax split. If you are not yet registered, ask the team how the store behaves without a GSTIN.
How long does GST registration take?
It varies with the completeness of your documents, authentication and any clarifications the tax authority requests. Prepare matching documents, complete authentication promptly, reply to queries quickly and ask your accountant for the current expectation.
Sources and further reading
Thresholds, categories and procedures are amended by notification, so the 2018 and 2019 CBIC documents below must be checked against current rules. Sources were last checked on 3 October 2026.
- Central Board of Indirect Taxes and Customs, GST: An Update, for registration threshold limits.
- Central Board of Indirect Taxes and Customs, FAQs on tax collection at source (updated 30 November 2018), for registration of suppliers through e-commerce operators and the definition of aggregate turnover.
- Goods and Services Tax Network, Apply for Registration Normal Taxpayer, Opt for Composition Scheme and the official GST portal.
- ShopMate, home, terms and conditions and pricing pages, for ShopMate features, responsibilities and pricing.
Disclaimer: This article is for general information only and is not legal, tax or financial advice. ShopMate is the publisher of this guide and has a commercial interest in the platform it describes. All figures in the scenarios, turnover tables and price examples are assumed for illustration, and the 18% rate is used only to show arithmetic. GST law, thresholds, notifications and procedures change, and your situation may differ. Consult a qualified chartered accountant or legal professional before making decisions.
Registered, or about to be? Set your store up properly
Once you have a GSTIN, your store should put it to work: automatic GST invoices, correct tax splits, GSTIN capture for business buyers and a report your accountant can use. ShopMate offers a 7-day free trial and a demo call, so you can see how invoices and reports work before you decide. Book a free demo, review the pricing details, or read more about ShopMate.